Explanation of Terms
=> Number of establishments and companies.
A separate report was required for each manufacturing establishment (plant)
with one employee or more. An establishment is defined as a single physical
location where manufacturing is performed. A company, on the other hand,
is defined as a business organization consisting of one establishment or
more under common ownership or control.
If the company operated at different physical locations, even if the
individual locations were producing the same line of goods, a separate
report was requested for each location. If the company operated in two or
more distinct lines of manufacturing at the same location, a separate
report was requested for each activity.
An establishment not in operation for any portion of the year was requested
to return the report form with the proper notation in the "Operational
Status" section of the form. In addition, the establishment was requested
to report data on any employees, capital expenditures, inventories, or
shipments from inventories during the year.
In this report, data are shown for establishments in operation at any time
during the year. A comparison with the number of establishments in
operation at the end of the year will be provided in the Introduction of
the General Summary subject report.
=> Employment and related items.
The report forms requested separate information on production workers for a
specific payroll period within each quarter of the year and on other
employees as of the payroll period which included the 12th of March.
-> All employees.
This item includes all full-time and part-time employees on the payrolls of
operating manu- facturing establishments during any part of the pay period
which included the 12th of the months specified on the report form.
Included are all persons on paid sick leave, paid holidays, and paid
vacations during these pay periods. Officers of corporations are included
as employees; proprietors and partners of unincorporated firms are
excluded. The "all employees" number is the average number of production
workers plus the number of other employees in mid-March. The number of
production workers is the average for the payroll periods including the
12th of March, May, August, and November.
-> Production workers.
This item includes workers (up through the line-supervisor level) engaged
in fabricating, processing, assembling, inspecting, receiving, storing,
handling, packing, warehousing, shipping (but not delivering), maintenance,
repair, janitorial and guard services, product development, auxiliary
production for plant's own use (e.g., power plant), recordkeeping, and
other services closely associated with these production operations at the
establishment covered by the report. Employees above the working-
supervisor level are excluded from this item.
-> All other employees.
This item covers nonproduction employees of the manufacturing establishment
including those engaged in factory supervision above the line-supervisor
level. It includes sales (including driver salespersons), sales delivery
(highway truckdrivers and their helpers), advertising, credit, collection,
installation and servicing of own products, clerical and routine office
function, executive, purchasing, financing, legal, personnel (including
cafeteria, medical, etc.), professional, and technical employees. Also
included are employees on the payroll of the manufacturing establishment
engaged in the construction of major additions or alterations to the plant
and utilized as a separate work force.
In addition to reports sent to operating manufacturing establishments,
information on employment during the payroll period which included March 12
and annual payrolls also was requested of auxiliary units (e.g.,
administrative offices, warehouses, and research and development
laboratories) of multiestablishment companies. However, these figures are
not included in the totals for individual industries shown in this report.
They are included in the General Summary and geographic area reports as a
separate category.
-> Payroll.
This item includes the gross earnings of all employees on the payrolls of
operating manufacturing establishments paid in the calendar year 1992.
Respondents were told they could follow the definition of payrolls used for
calculating the Federal withholding tax. It includes all forms of
compensation, such as salaries, wages, commissions, dismissal pay, bonuses,
vacation and sick leave pay, and compensation in kind, prior to such
deductions as employees' Social Security contributions, withholding taxes,
group insurance, union dues, and savings bonds. The total includes salaries
of officers of corporations; it excludes payments to proprietors or
partners of unincorporated concerns. Also excluded are payments to members
of Armed Forces and pensioners carried on the active payrolls of
manufacturing establishments.
The census definition of payrolls is identical to that recommended to all
Federal statistical agencies by the Office of Management and Budget. It
should be noted that this definition does not include employers' Social
Security contributions or other nonpayroll labor costs, such as employees'
pension plans, group insurance premiums, and workers' compensation.
-> Production-worker hours.
This item covers hours worked or paid for at the plant, including actual
overtime hours (not straight-time equivalent hours). It excludes hours paid
for vacations, holidays, or sick leave.
=> Cost of materials.
This term refers to direct charges actually paid or payable for items
consumed or put into production during the year, including freight charges
and other direct charges incurred by the establishment in acquiring these
materials. It includes the cost of materials or fuel consumed, whether
purchased by the individual establishment from other companies, transferred
to it from other establishments of the same company, or withdrawn from
inventory during the year.
The important components of this cost item are (1) all raw materials,
semifinished goods, parts, containers, scrap, and supplies put into
production or used as operating supplies and for repair and maintenance
during the year, (2) electric energy purchased, (3) fuels consumed for
heat, power, or the generation of electricity, (4) work done by others
on materials or parts furnished by manufacturing establishments (contract
work), and (5) products bought and resold in the same condition. (See
discussion of duplication of data below.)
=> Value of shipments.
This item covers the received or receivable net selling values, f.o.b.
plant (exclusive of freight and taxes), of all products shipped, both
primary and secondary, as well as all miscellaneous receipts, such as
receipts for contract work performed for others, installation and repair,
sales of scrap, and sales of products bought and resold without further
processing. Included are all items made by or for the establishments from
materials owned by it, whether sold, transferred to other plants of the
same company, or shipped on consignment. The net selling value of products
made in one plant on a contract basis from materials owned by another was
reported by the plant providing the materials.
In the case of multiunit companies, the manufacturer was requested to
report the value of products transferred to other establishments of the
same company at full economic or commercial value, including not only the
direct cost of production but also a reasonable proportion of "all other
costs" (including company overhead) and profit. (See discussion of
duplication of data below.)
=> Duplication in cost of materials and value of shipments.
The aggregate of the cost of materials and value of shipments figures for
industry groups and for all manufacturing industries includes large amounts
of duplication since the products of some industries are used as materials
by others. This duplication results, in part, from the addition of related
industries representing successive stages in the production of a finished
manufactured product. Examples are the addition of flour mills to bakeries
in the food group and the addition of pulp mills to paper mills in the
paper and allied products group of industries. Estimates of the overall
extent of this duplication indicate that the value of manufactured products
exclusive of such duplication (the value of finished manufactures) tends to
approximate two-thirds of the total value of products reported in the
annual survey.
Duplication of products within individual industries is significant within
a number of industry groups, e.g., machinery and transportation industries.
These industries frequently include complete machinery and their parts. In
this case, the parts made for original equipment are materials consumed for
assembly plants in the same industry.
Even when no significant amount of duplication is involved, value of
shipments figures are deficient as measures of the relative economic
importance of individual manufacturing industries or geographic areas
because of the wide variation in ratio of materials, labor, and other
processing costs of value of shipments, both among industries and within
the same industry.
Before 1962, cost of materials and value of shipments were not published
for some industries which included considerable duplication. Since then,
these data have been published for all industries at the U.S. level and
beginning in 1964, for all geographic levels.
=> Value added by manufacture.
This measure of manufacturing activity is derived by subtracting the cost
of materials, supplies, containers, fuel, purchased electricity, and
contract work from the value of shipments (products manufactured plus
receipts for services rendered). The result of this calculation is adjusted
by the addition of value added by merchandising operations (i.e., the
difference between the sales value and the cost of merchandise sold without
further manufacture, processing, or assembly) plus the net change in
finished goods and work-in-process between the beginning- and end-of-year
inventories.
For those industries where value of production is collected instead of
value of shipments (see footnote in table 1a), value added is adjusted only
for the change in work-in-process inventories between the beginning and end
of year. For those industries where value of work done is collected, the
value added does not include an adjustment for the change in finished goods
or work-in-process inventories.
"Value added" avoids the duplication in the figure for value of shipments
that results from the use of products of some establishments as materials
by others. Value added is considered to be the best value measure available
for comparing the relative economic importance of manufacturing among
industries and geographic areas.
=> New capital expenditures.
For establishments in operation and any known plants under construction,
manufacturers were asked to report their new expenditures for (1) permanent
additions and major alterations to manufacturing establishments, and (2)
machinery and equipment used for replacement and additions to plant
capacity if they were of the type for which depreciation accounts were
ordinarily maintained.
The totals for new expenditures include expenditures leased from
nonmanufacturing concerns through capital leases. New facilities owned by
the Federal Government but operated under contract by private companies,
and plant and equipment furnished to the manufacturer by communities and
nonprofit organizations are excluded. Also excluded are expenditures for
used plant and equipment (although reported in the census), expenditures
for land, and cost of maintenance and repairs charged as current operating
expenses.
=> End-of-year inventories.
Respondents were asked to report their 1991 and 1992 end-of-year
inventories at cost or market. Effective with the 1982 Economic Census,
this change to a uniform instruction for reporting inventories was
introduced for all sector reports. Prior to 1982, respondents were
permitted to value inventories using any generally accepted accounting
method (FIFO, LIFO, market, to name a few). In 1982, LIFO users were asked
to first report inventory values prior to the LIFO adjustment and then to
report the LIFO reserve and the LIFO value after adjustment for the
reserve.
Because of this change in reporting instructions, the 1982 through 1992
data for inventories and value added by manufacture included in the tables
of this report are not comparable to the prior-year data shown in table 1a
of this report and in historical census of manufactures and annual survey
of manufactures publications.
=>Specialization and coverage ratios.
These items are not collected on the report forms but are derived from the
data shown in file MC92F5B.dbf. An establishment is classified in a
particular industry if its shipments of primary products of that industry
exceed in value its shipments of the products of any other single industry.
An establishment's shipments include those products assigned to an industry
(primary products), those considered primary to other industries (secondary
products), and receipts for miscellaneous activities (merchandising,
contract work, resales, etc.). Specialization and coverage ratios have
been developed to measure the relationship of primary product shipments to
the data on shipments for the industry.
Specialization ratio represents the ratio of primary product shipments to
total product shipments (primary and secondary, excluding miscellaneous
receipts) for the establishments classified in the industry.
Coverage ratio represents the ratio of primary products shipped by the
establishments classified in the industry to the total shipments of
such products that are shipped by all manufacturing establishments wherever
classified.